Deck 7: Accounting Information Systems

Question 1

The three stages of data processing are:

A) inputs, decision making and outputs.
B) source documents, processing and decision making.
C) processing, reports and decision making.
D) inputs, processing and outputs.

Answer 1

D

Question 2

In a computerised accounting system,processing performed continuously as the transactions occur is referred to as:

A) online processing.
B) module processing.
C) quick processing.
D) batch processing.

Answer 2

A

Question 3

The set of programs that causes the computer to perform the work desired is called the:

A) software.
B) hardware.
C) network.
D) server.

Answer 3

A

Question 4

The Curtis Antique Shop is designing an accounting information system.Which of the following should Curtis consider when designing the system?

A) It should be designed to meet all the requirements of management, regardless of the costs involved.
B) It should be compatible with the company's structure and personnel.
C) It should allow employees flexibility in setting the working hours.
D) Curtis should consider all of the above.

Question 5

Special journals are a means of classifying transactions according to type to attain greater efficiency in processing.

Question 6

ERP systems are used by some large organisations.ERP stands for:

A) Early Reporting Process.
B) Expense and Revenue Program.
C) Enterprise Resource Planning.
D) Enterprise Record Package.

Question 7

A company's computer data processing system consists of:

A) personnel, records, procedures.
B) software, hardware, personnel.
C) general journal, special journal, general ledger.
D) none of the above

Question 8

Keeping accurate records of accounts receivable is an example of which feature of a good accounting information system?

A) favourable cost-benefit relationship
B) flexibility
C) control
D) compatibility

Question 9

The main computer in a network,where the program and data are stored,is called the:

A) hardware.
B) server.
C) software.
D) database.

Question 10

A chart of accounts uses number ranges for accounts.

Question 11

Hide and Seek has retail outlets at both large shopping centres and small plazas.Its accounting information system is able to track total revenues by store,by type of shopping centre,by size of store,by state and by region.This is an example of which feature of a good information accounting system?

A) compatibility
B) favourable cost-benefit relationship
C) control
D) flexibility

Question 12

Which of the following is not a feature of an ERP system?

A) It feeds data into software for all firm activities.
B) It requires little staff training.
C) The impact of changes in one part of the organisation is automatically reflected elsewhere.
D) Separate systems for payroll and sales may be unnecessary.

Question 13

The combination of personnel,records and procedures that a business uses to meet its need for financial data is referred to as the:

A) accounting information system.
B) management system.
C) input system.
D) collecting and reporting system.

Question 14

Inputs to an accounting system would include:

A) invoices.
B) bank deposit slips.
C) both of the above
D) none of the above

Question 15

Hardware is the electronic equipment that includes:

A) computers, monitors, printers and networks.
B) monitors, printers, software and databases.
C) monitors, printers, software and networks.
D) computers, monitors and software.

Question 16

Which of the following is a feature of an effective accounting information system?

A) compatibility
B) control
C) flexibility
D) all of the above

Question 17

Horn Music has recently decided to add harpsichords to its musical instrument product line.The accounting information system feature that would allow this change to be handled efficiently is:

A) compatibility.
B) flexibility.
C) control.
D) favourable cost-benefit relationship.

Question 18

The final stage of data processing for an accounting system is the:

A) preparation of the special journals.
B) posting of transactions to the ledger accounts.
C) generation of the accounting reports.
D) preparation of the trial balance.

Question 19

A well-designed accounting system must be able to accommodate change.

Question 20

All of the following are common examples of special journals,except:

A) cash receipts journal.
B) sales journal.
C) purchases journal.
D) accounts payable journal.

Question 21

Spreadsheets are organised:

A) alphabetically.
B) by departments.
C) as a rectangular grid.
D) by debits and credits.

Question 22

A column for Cost of sales appears in which of the following journals?

A) Cash payments and purchases
B) Sales and purchases
C) Cash receipts and sales
D) Cash payments and cash receipts

Question 23

A cash receipts journal could contain all of the following columns except:

A) sales revenue.
B) purchases.
C) accounts receivable.
D) cash.

Question 24

Computerised accounting packages are organised by modules.Changes to one module will automatically update information in other modules.

Question 25

The total of all balances in the accounts receivable subsidiary ledger should equal the balance of the:

A) accounts receivable account in the general ledger.
B) cash account in the general ledger.
C) accounts payable account in the general ledger.
D) sales revenue account in the general ledger.

Question 26

Assuming the use of special journals,borrowing $10 000 from the bank would be recorded in the:

A) cash receipts journal.
B) sales journal.
C) general journal.
D) cash payments journal.

Question 27

Inputs into accounting systems are the reports used for decision making,including the financial statements.

Question 28

Posting the entries in the sales journal to the general ledger:

A) should be done on a daily basis.
B) should be done at the end of each month.
C) should be done only at the end of the accounting period.
D) should be done on a weekly basis.

Question 29

The account that is credited for every transaction entered in the sales journal is:

A) cash.
B) accounts payable.
C) accounts receivable.
D) sales.

Question 30

Posting the entries in the sales journal to the accounts receivable subsidiary ledger should be done:

A) at the end of each month.
B) only at the end of the accounting period.
C) on a daily basis.
D) on a weekly basis.

Question 31

The sales journal is used to record the sale of:

A) inventory on credit.
B) assets other than inventory for cash.
C) assets other than inventory on credit.
D) inventory for cash.

Question 32

Computer programs that link data by means of formulas and functions are referred to as:

A) spreadsheets.
B) inputs.
C) subsidiary ledgers.
D) networks.

Question 33

Spreadsheets are ideally suited to preparing budgets.

Question 34

The chart of accounts lists all the accounts and their account numbers.

Question 35

Downing Distributors returned defective supplies and received a cash refund.Assuming the use of special journals,this entry would be recorded in the:

A) sales journal.
B) general journal.
C) cash payments journal.
D) cash receipts journal.

Question 36

Each cell in a spreadsheet is defined by:

A) formulas and labels.
B) a row number and a label.
C) a row number and a column letter.
D) a formula and a column number.

Question 37

Design of an accounting information system begins with a trial balance.

Question 38

The accounts receivable credit column of the cash receipts journal is:

A) posted in summary only at the end of the month.
B) posted in summary at the end of the month and by individual amounts on a daily basis.
C) posted by individual amounts at the end of the accounting period.
D) posted by individual amounts at the end of the month.

Question 39

The general ledger accounts used when posting the sales journal are:

A) sales returns and allowances, sales revenue, accounts receivable and cost of sales.
B) sales revenue, cost of sales, inventory, accounts receivable and GST clearing account.
C) purchases, sales returns and allowances, sales revenue, accounts receivable and GST clearing account.
D) cash, sales revenue, accounts payable and inventory.

Question 40

Accounts that provide supporting details for a control account in the general ledger are known as a:

A) special journal.
B) control account.
C) spreadsheet.
D) subsidiary ledger.

Question 41

The sum of the account balances in the accounts receivable subsidiary ledger should equal the balance in the accounts receivable account in the general ledger.

Question 42

Assume a perpetual inventory system.A purchase on credit for $1 650 including 10% GST would be recorded in the purchases journal as:

A) debit to Inventory $1 650, credit to GST clearing account $150, credit to Accounts payable $1 500.
B) debit to Inventory $1 500, debit to GST clearing account $150, credit to Accounts payable $1 650.
C) debit to Inventory $1 500, credit to Accounts payable $1 500.
D) none of the above

Question 43

Sales discount is recorded in the general journal.

Question 44

Rockhill Industries received payment after the expiration of the discount period from a customer who had purchased goods on credit.The sales invoice was for $3 000 and credit terms were 3/15 n/30.Ignore GST.In the cash receipts journal:

A) $3 000 will appear in the accounts receivable credit column.
B) $3 000 will appear in the sales revenue credit column.
C) $3 000 will appear in the accounts receivable debit column.
D) none of the above

Question 45

The individual amounts in the 'Accounts receivable' column of the sales journal are posted:

A) individually to the sales account in the general ledger.
B) individually to the accounts receivable account in the general ledger.
C) in total to the accounts receivable subsidiary ledger.
D) individually to the accounts receivable subsidiary ledger.

Question 46

Which special journal could contain a column for sales discount?

A) purchases journal
B) sales journal
C) cash receipts journal
D) cash payments journal

Question 47

Transactions in the sales journal are posted to both the general ledger and the accounts receivable subsidiary ledger.

Question 48

Amounts are posted individually from the purchases journal to the:

A) inventory account in the general ledger.
B) cash account in the general ledger.
C) accounts payable account in the general ledger.
D) accounts payable subsidiary ledger.

Question 49

Assume that a company has only four customers: A,B,C and D.The accounts receivable balance in the general ledger is $8683 and the accounts receivable subsidiary ledger of customers A,C and D have $1846,$3196 and $3440,respectively.Calculate the amount in the accounts receivable subsidiary ledger account of customer B.

A) $891
B) $8482
C) $2047
D) $201

Question 50

The purchase of equipment for cash would be recorded in the:

A) sales journal.
B) purchases journal.
C) general journal.
D) cash payments journal.

Question 51

Fantasia Enterprises received a tax refund cheque in the mail and immediately deposited it in the bank.Assuming the use of special journals,this entry would be recorded in the:

A) general journal.
B) cash receipts journal.
C) cash payments journal.
D) none of the above

Question 52

Litten Enterprises received payment in full from a customer who had purchased goods on credit.Assuming the use of special journals,this entry would be recorded in the:

A) sales journal.
B) general journal.
C) purchases journal.
D) cash receipts journal.

Question 53

Lee Enterprises received payment within the discount period from a customer who had purchased goods on credit.The sales invoice was for $2 000 and credit terms were 3/15 n/30.Ignore GST.In the cash receipts journal,$1 940 will appear in the:

A) accounts receivable debit column.
B) sales revenue credit column.
C) cash credit column.
D) cash debit column.

Question 54

Which statement concerning the accounts payable subsidiary ledger is incorrect?

A) It keeps track of amounts owing to individual creditors.
B) The postings from the purchases journal are to the credit of the individual subsidiary ledger accounts.
C) The debit entries equal the credit entries.
D) None of the above are incorrect, i.e. all are correct statements.

Question 55

The end-of-month balance in Dryer Industries' cash receipts journal's 'Other accounts,amount' column is $22 630.How will this column be posted?

A) The total will be posted to the cash account as a debit.
B) The total will not be posted.
C) The individual items will be posted to their respective accounts.
D) B and C are both correct.

Question 56

Which column in the cash payments journal involves a posting to both the general ledger and the subsidiary ledger?

A) Cash credit column
B) Other accounts debit column
C) Accounts payable debit column
D) Inventory debit column

Question 57

Assuming the use of special journals,the purchase of inventory from Landin Browning for cash would be recorded in the:

A) cash receipts journal.
B) general journal.
C) cash payments journal.
D) purchases journal.

Question 58

Debit postings to the accounts receivable general ledger account come from the cash receipts journal and the general journal.

Question 59

When special journals are used,all transactions must be posted individually to the general ledger.

Question 60

On 1 April,Pro Supplies received a cheque from Carter Services for payment of an invoice dated 24 March for $1 800 with credit terms of 2/10 n/30.Assuming the payment includes 10% GST,how would this transaction be recorded in Pro's cash receipts journal?

A) debit Cash $1 800, credit Accounts receivable-Carter Services $1 800
B) debit Cash $1 764, debit Sales discount $36, credit Accounts receivable-Carter Services $1 800
C) debit Cash $1 764, debit Sales discount $33, debit GST clearing account $3, credit Accounts receivable-Carter Services $1 800
D) debit Cash $1 800, credit Sales discount $33, credit GST clearing account $3, credit Accounts receivable-Carter Services $1 764

Question 61

Ruby Gems purchases inventory from Diamond Mining.On 3 September,they received a credit note from Diamond Mining as they had been charged $3.85 rather than $3.58 for each of the 100 items purchased.What entry will Diamond Mining make? Ignore GST.

A) Accounts payable-Ruby Gems 27 Inventory 27
B) Inventory 27 Accounts payable-Ruby Gems 27
C) Sales returns and allowances 27 Accounts receivable-Ruby Gems 27
D) Sales returns and allowances 27 Inventory 27

Question 62

If special journals are used,the purchase of inventory for cash would be recorded in the cash payments journal.

Question 63

The accounts payable subsidiary ledger has postings from which set of journals?

A) Purchases, cash receipts and sales
B) Sales, cash payments and general
C) Purchases, general and cash receipts
D) Purchases, general and cash payments

Question 64

Some transactions can be recorded in both the general journal and the special journals.

Question 65

Which of the following is an alternative title for the cash payments journal?

A) The payments register
B) The cheque register
C) Cash disbursements journal
D) All of the above are alternative titles for the cash payments journal.

Question 66

If creditors are paid within the discount period,the current treatment required by the accounting standards for the discount received is to:

A) debit the Discount received account.
B) credit the Discount allowed account.
C) credit the Inventory account with the net settlement discount.
D) No entry is required.

Question 67

The accounts payable subsidiary ledger controls the accounts payable account in the general ledger.

Question 68

The transaction that would not be recorded in the general journal is

A) credit purchase of goods for resale.
B) depreciation of equipment.
C) accrued salaries.
D) sales returns.

Question 69

Entries in the purchases journal are posted to the:

A) general ledger only.
B) general ledger and the accounts payable subsidiary ledger.
C) accounts payable subsidiary ledger only.
D) accounts payable subsidiary ledger and the purchases ledger.

Question 70

On 4 May,a retail firm pays a rent of $2200 for the month of April.Which of the following is true when this transaction is recorded in a cash payment journal?

A) Both assets and liabilities will decrease by $2200.
B) Both assets and equity will decrease by $2200.
C) Both assets and equity will increase by $2200.
D) Both liabilities and equity will increase by $2200.

Question 71

Pierce Arrows sold a piece of land for $800 000,accepting a 10-year loan receivable for the amount.Assuming the use of special journals,this entry would be recorded in the:

A) general journal.
B) non-current asset journal.
C) cash receipts journal.
D) sales journal.

Question 72

Which journals would have a column for GST?

A) Purchases and sales
B) All the special journals
C) Cash receipts and cash payments
D) Cash receipts and sales

Question 73

With a manual accounting system,adjusting and closing entries:

A) are recorded in the cash payments journal.
B) are recorded in the general journal.
C) are not recorded when a business uses special journals.
D) are recorded in the cash receipts journal.

Question 74

Big Industries purchased products from Small Suppliers,paying $5 000 in cash and promising to pay the remaining $5 000 in 30 days.Assuming the use of special journals,this entry would be recorded by Big Industries in the:

A) purchases journal.
B) general journal.
C) cash payments journal.
D) Both A and C

Question 75

Bryson Company records returns and allowances in the general journal.On 25 June,Bryson issued a $120 debit note for goods purchased on credit from Crimson because part of what was sent was not what Bryson ordered.What entry does Bryson make? Ignore GST and assume a perpetual inventory system.

A) Accounts payable-Crimson 120 Inventory 120
B) No entry is required by Bryson.
C) Accounts payable-Crimson 120 Accounts receivable-Crimson 120
D) Accounts receivable-Crimson 120 Sales returns and allowances 120

Question 76

The purchase of office equipment on credit would be recorded in:

A) the cash payments journal.
B) either the cash payments journal or the purchases journal.
C) the purchases journal.
D) the cash receipts journal.

Question 77

The general journal is used to record all transactions that do not fit one of the special journals.

Question 78

The journal in which all transactions that do not fit into the special journals are recorded is the:

A) cash receipts journal.
B) purchases journal.
C) general journal.
D) sales journal.

Question 79

A company has four vendors and the accounts payable subsidiary ledger shows the following balances.
$$\begin{array} { | l | l | } \hline \text { Alpha } & \$ 282,821 \\\hline \text { Beta } & 151,474 \\\hline \text { Gamma } & 88,943 \\\hline \text { Delta } & 37,187 \\\hline\end{array}$$
Calculate the accounts payable balance in the general ledger.

A) $277,604
B) $434,295
C) $560,425
D) $282,821

Question 80

When a business returns goods to the seller,it may accompany the goods with a document known as a:

A) debit note.
B) credit note.
C) debit memo.
D) A and C are correct.